Sainsbury’s is bracing for a shareholder backlash over pay when it faces investors at its annual general meeting on Thursday.
The UK’s second biggest grocer is facing calls to pay the independently set living wage for all staff and contracted workers.
Responsible investment charity Share Action has tabled a resolution calling for the supermarket to commit to paying the sum, currently £9.90 per hour across the UK and £11.05 per hour in London.
Demand: The UK’s second biggest grocer is facing calls to pay the independently set living wage for all staff and contracted workers
Share Action campaign manager Rachel Hargreaves said as well as being the right thing, ‘the business case is compelling’. She said: ‘There is no excuse for a highly profitable company with multi-million pound executive salaries refusing to guarantee all its staff a basic standard of living.’ Sainsbury’s has urged shareholders to reject the motion as it wants to manage its own wage bills. It has spent £100m this year increasing salaries and was the first major retailer to pay the real living wage.
Chairman Martin Scicluna has argued Sainsbury’s pays more than rival grocers.
In a letter to shareholders, he said: ‘We believe it is right to make independent decisions, rather than have them determined by a separate external body.’
Shareholder advisers ISS and Glass Lewis have also recommended shareholders reject the motion. It requires 75 per cent support to pass, but even a vote of 20 per cent would force Sainsbury’s to hold talks with shareholders on the issue.
But the motion has won high-profile backers, setting the stage for a rebellion. In recent weeks insurer Aviva, which has a 0.3 per cent stake in Sainsbury’s worth £15m, indicated it would back the motion. Other supporters include Fidelity International, HSBC Asset Management and the Queen’s bank, Coutts.
The showdown comes a month after Sainsbury’s boss Simon Roberts faced a backlash after his pay tripled to £3.8m – 183 times as much as an average Sainsbury’s employee.
Danny Magill of The Equality Trust said: ‘Low pay drives inequality which slows economic growth and stokes instability, presenting material risks to investors. We expect investors to support this resolution.’
Sainsbury’s posted profits of £730m for the 12 months to March 5.
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